Use Cases & Comparison • Benzinga

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Bitcoin is the first decentralized peer-to-peer cryptocurrency that introduced the world to blockchain development, planting the seed that would later become decentralized finance (DeFi). DeFi development has steadily gained ascendency as new platforms are constantly created to solve contemporary problems. Cardano is a proof-of-stake (PoS) blockchain platform that says its goal is to redistribute power from unaccountable power structures to individuals.

Bitcoin was initially created as a peer-to-peer currency, although over time it has become impractical for everyday micro-transactions. Other alternative cryptos provide faster transaction times with lower fees — so where does Bitcoin get its value?

Many people often make the comparison: Bitcoin is the digital equivalent of gold. Like gold, Bitcoin is a scarce resource that large numbers of people agree to give value. In contrast to heavy-to-lug, continuously mineable gold bars, Bitcoin is easy to move and transact; is confined to a finite, hard-capped supply of 21 million; and is easily accessible to buy as little or as much as you want. These factors make Bitcoin, which essentially pioneered the entirety of decentralization, an especially strong asset because it fundamentally holds the crypto market. 

So what is the value of Bitcoin? Its purpose is a store of value. As an asset, it is something that you allocate fiat to with the intent to receive better returns then letting your dollar suffer from inflation. 

Cardano is a layer-1 decentralized PoS blockchain platform designed to be a more efficient alternative to proof-of-work (PoW) networks. Cardano hopes to facilitate the development of decentralized applications (dApps) and different protocols with its recent deployment of the Alonzo hard-fork. Cardano’s largest use-case is that it is currently utilized by agricultural companies to track different produce, although users are adamant there will be many more applications.

Proof of Work (PoW) is the first blockchain verification mechanism introduced by Bitcoin, where computing power is used to verify transactions referred to as “nodes.” Then came along Proof of Stake (PoS), where instead of computing power, a financial stake is used to verify transactions. PoS locks up a validator’s coins in exchange for being able to verify transactions, effectively using them as collateral, so if a validator tries to be malicious, the stake coins will get “slashed” or a portion of the staker’s funds will be lost as punishment for misbehavior. The action occurs by hosting staking pools. PoW has quickly become outdated-tech as it raises many environmental concerns as well as scalability issues.

Bitcoin’s current market cap is just over $1 trillion, with a circulating supply of 18 million BTC. Making it the largest cryptocurrency by market cap currently available. Cardano’s market cap is currently $70 billion, with a circulating supply of 32 billion ADA, currently claiming its spot as the 4th largest cryptocurrency by market cap. 

Cardano recently launched Alonzo, a hard-fork bringing smart contract functionality to the blockchain, although real utility is a while out as users are not able to build on the network. Cardano’s layer-2 network, the Hydra, has some adoption, but it is not as popular as blue-chip cryptos like Ethereum. Ouroboros Hydra, a major scientific achievement and a significant milestone in the development of Cardano, breaks new ground in PoS scalability. With Hydra, Cardano can really become more energy efficient and more sustainable than alternative coins. 

As previously mentioned, Bitcoin’s primary use case is a store of value. Many investors buy it with the intent to hold it for an extended period of time while it appreciates in value. You can do the same with ADA if you are a believer in the project, but it is also possible to stake your ADA in order to earn interest on the amount you are willing to allocate. Once smart contracts are fully operational on Cardano, ADA will have more clear use cases than it does today.

You can buy Bitcoin and Cardano on an exchange like Coinbase Global Inc (NASDAQ: COIN), eToro and Webull. A digital asset exchange is a great choice for individuals looking to start buying cryptocurrency. Make sure to do your own research before buying cryptocurrency, as they are very volatile assets. 

1 Minute Review

eToro, headquartered in Cyprus, England and Israel, has provided forex products and other CFD derivatives to retail clients since 2007. A major eToro plus is its social trading operations, including OpenBook, which allows new clients to copy trade the platform’s best performers. Its social trading features are top notch, but eToro loses points for its lack of tradable currency pairs and underwhelming research and customer service features

Best For

  • U.S. based cryptocurrency traders
  • Social and copy traders
  • Simple user interface
  • Community engagement and following other traders
Pros

  • 25 cryptocurrencies
  • Expansive network of social trading features
  • Large client base for new traders to imitate
Cons

  • U.S. traders can only buy cryptocurrency


get started

securely through Interactive Broker’s
website

1 Minute Review

Coinbase is one of the Internet’s largest cryptocurrency trading platforms. From Bitcoin to Litecoin or Basic Attention Token to Chainlink, Coinbase makes it exceptionally simple to buy and sell major cryptocurrency pairs. 

You can even earn cryptocurrency rewards through Coinbase’s unique Coinbase Earn feature. More advanced traders will love the Coinbase Pro platform, which offers more order types and enhanced functionality.

Though Coinbase doesn’t offer the most affordable pricing or the lowest fees, its simple platform is easy enough for complete beginners to master in as little as a single trade.

Best For

  • New cryptocurrency traders
  • Cryptocurrency traders interested in major pairs
  • Cryptocurrency traders interested in a simple platform
Pros

  • Simple platform is easy to operate
  • Comprehensive mobile app mirrors desktop functionality
  • Coinbase Earn feature rewards you with crypto for learning about available coins
Cons

  • Higher fees than competitors

Bitcoin is a much safer investment than ADA, primarily because it backs the entirety of the crypto market. ADA is also widely speculated at this point, where Bitcoin has a very clear value that you either believe in or you don’t. ADA may have more growth potential if it succeeds with its smart contract integration. For Cardano to reach the market cap of Bitcoin, it would need to grow over 1,400% in total market cap. 

The total market cap for all cryptocurrencies is about $2 trillion in October 2021. The current crypto market structure seems bullish as Bitcoin begins a rally. If Bitcoin continues trending in the upward direction, a generous increase in the total crypto market cap could occur. 

From an investment standpoint, Bitcoin is a safer investment. It is better established and has a much larger community. When it comes to a development standpoint, Cardano could be better because it will soon have the ability to facilitate other dApps. Considering that ADA is around $2 a coin with a $70 billion market cap, a large influx of capital investment into ADA would be necessary for you to see significant returns. Do your own research before investing in cryptocurrency.

Benzinga crafted a specific methodology to rank cryptocurrency exchanges and tools. We prioritized platforms based on offerings, pricing and promotions, customer service, mobile app, user experience and benefits, and security. To see a comprehensive breakdown of our methodology, please visit see our Cryptocurrency Methodology page.

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